In Apple and Google’s Fight Over Data Security, Users Are the Winners

When it comes to the protecting the privacy and security of your online data, which company does a better job, Apple or Google? Not surprisingly, the leaders of each of these companies have very different opinions on the issue.

Last month, Apple CEO Tim Cook published an open letter to users that highlighted the company’s commitment to data privacy and security in the wake of the iCloud hacking scandal that resulted in dozens of celebrities’ stolen photos being posted on the Internet. While the ostensible purpose of the letter was to explain how the company handles customers’ personal information, Cook apparently couldn’t help but take a less-than-subtle swipe at Google, the company that Apple considers to be its biggest rival.

“A few years ago, users of Internet services began to realize that when an online service is free, you’re not the customer. You’re the product,” wrote Cook. “But at Apple, we believe a great customer experience shouldn’t come at the expense of your privacy.”

While Cook didn’t specifically name Google, it seemed pretty clear that the CEO was referring to the Internet search giant’s many free services and the advertising revenue that it derives from selling users’ data. In a recent interview with CNN Money, Google Chairman Eric Schmidt fired back at Cook’s insinuations. “Someone didn’t brief him correctly on Google’s policies — it’s unfortunate for him,” Schmidt said. “We have always been the leader in security and encryption. Our systems are far more secure and encrypted than anyone else, including Apple. They’re catching up, which is great.”

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So who’s right? Following the exposure of the government’s bulk data collection program by former NSA contractor Edward Snowden last year and the recent breach of Apple’s iCloud, the public has grown increasingly concerned with issues related to online privacy and security. For Apple and Google, this means that touting their security and privacy features is less about bragging rights between company executives than it is about retaining customers. Since Cook and Schmidt each has an obvious interest in claiming that his company does a better job of protecting users’ data, it’s best to seek the opinion of an independent third party.

The Electronic Frontier Foundation (EFF) is a digital rights organization that issues an annual report about which companies do the best job of protecting users’ privacy, including resisting government requests for their data. The organization uses six criteria to rank companies’ privacy protection efforts: requiring a warrant for content of communications; telling users about government data requests; publishing transparency reports; publishing law enforcement guidelines; fighting for users’ privacy rights in courts; and fighting for users’ privacy rights in Congress. While Apple and Google both received the EFF’s highest ranking this year, a closer look at the report appears to support Schmidt’s contention that Apple is “catching up” to Google.

As noted by the EFF, “Google has long led the way in transparency reports, creating detailed reports on government access requests long before other tech companies began doing so.” Google improved from five stars last year to six stars this year, and the company has never gone lower than three and a half stars since the EFF began issuing its annual report in 2011. On the other hand, the EFF said that “Apple’s rating is particularly striking because it had lagged behind industry competitors in prior years, earning just one star in 2011, 2012, and 2013.”

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Since both companies were granted equal ranking in the EFF’s latest report, it seems fair to say that at this point in time, both have approximately the same level of privacy and security for users’ online data. However, it should also be noted that a straight comparison between the privacy and security policies of these two companies is like comparing, well, apples and oranges.

Although Apple makes some money from advertising based on user data, its primary business has always been about hardware, rather than information. Over half of Apple’s annual revenue comes from the sale of its iPhones. This means that Apple naturally has less user information to keep secure than Google does. While Cook claimed, “We don’t build a profile based on your email content or Web browsing habits to sell to advertisers,” it should be noted that Apple still collects plenty of data about its users.

And though Apple says that much of the data that it collects is used to improve user experience, rather than advertising, it should be pointed out that Apple does not control the privacy practices of third-party apps used on its devices. The California-based company may not directly be in the business of monetizing users’ data, but the company is indirectly benefitting from third parties that monetize its users’ data by taking a cut of all app revenue.

Meanwhile, the vast majority of Google’s annual revenue is directly derived from advertising. Last year, Google made a little over $55.5 billion in total revenue, and almost $50.6 billion of that revenue came from advertising alone. According to Schmidt, just because Google makes most of its money from advertising doesn’t mean that its services come at the expense of users’ privacy. “Aside from the fact that we show ads in Gmail — which we’ve done for a decade and we use that information for nothing — all the other things [Cook] implied we’re doing, we don’t,” Schmidt told CNN Money.

Source: Thinkstock

Regardless of which company you may feel does a better job of protecting the privacy and security of your online data, recent events have shown that neither company is completely immune from the other’s security breaches. While Apple was widely criticized for failing to prevent hackers from gaining access to users’ iCloud accounts, it now appears that Google is also being held accountable in the celebrity photo hacking.

According to a report from the New York Post, lawyers for some of the celebrities are threatening to sue Google for $100 million for allegedly failing to remove the images quickly enough from its search engine results. The lawyer for the unnamed celebrities claimed that Google is trying to benefit from Apple’s security breach by collecting “millions of dollars in advertising revenue.”

As the celebrity photo leak demonstrates, once a user’s data has been exposed, it can negatively affect all companies, regardless of how the breach originated. Fortunately, it appears that the argument between Apple and Google over which company has the best security will also benefit all consumers, regardless of which smartphone brand or email service they use. Soon after news of the iCloud hacking scandal broke, Apple announced that its latest mobile operating system, iOS 8, would feature a default encryption setting that prevents anyone but the device’s owner from gaining access to the data stored on the device.

Soon after, Google announced that its upcoming Android release would include a similar default encryption feature. In this sense, regardless of which company you think does a better job of protecting your data, it appears that the real winners will be both companies’ users.